Expenses of future periods as a separate accounting category – difficulties of application

Abstract

The object of research is the preparation of the procedure for the formation and write-off of the accounting category of expenses of future periods. The difficulty of this issue for practicing accountants is the lack of detailing of their composition, accounting and write-off in regulatory documents. In the national regulations (standards) of accounting (which are the main regulatory document on accounting), there is no definition of this category, as well as its components and the order of their attribution to the expenses of the current period. That is why the criteria for the recognition of expenses were defined, the period of their recognition was determined, and the reasons why some expenses cannot be classified as current expenses in accordance with NAR(S) (National accounting regulations (standards)) were analyzed. The difference between some components of expenses of future periods that are similar in name and expenses that are not included in current expenses according to NAR(S) was clarified. It is also clarified how those expenses of future periods should be reflected, which by all indications can be attributed to this category, however, according to the write-off period, they cannot be credited to account 39 «Expenses of future periods» and entered in the 2nd section of the Balance Sheet «Current assets». In addition, the presence of expenses of future periods as part of separate lines of financial statements according to IFRS (International Financial Reporting Standards) is disclosed. Various options for writing off the expenses of future periods and including them in the composition of the expenses of the current period were also considered. Depending on the time of receipt of income for which these expenses were incurred, it can be carried out in equal parts, proportionally or using other methods.